Investors are all set for a choppy week as the coming first seven days of October will witness a convergence of politics, economic data and worries concerning Deutsche Bank to stir up the stock market. A number of important economic indicators are on line to be released. These includes September auto sales, weekly jobless claims, non-farm payrolls, ISM and ISM data for non-manufacturing.
The Federal Reserve kept its interest rates unchanged on the light of softer data during September. It is no wonder that participants in the market will be extremely interested to understand the latest signals emanating from economic sector. Phil Orlando of Fed rated Investors holds the opinion that investors will closely follow happenings to find out whether October will be better than September.
There was a dip from 52.6 percent in August to 49.4 percent in September in ISM manufacturing index. It went to negative territory after a long time. The last time it did this was in February. About 151,000 jobs were added to the US employment list. This does not cover the projected 170,000 as outlined by economists during a MarketWatch survey.
Politics and banks
Politics is also another trouble point. The upcoming vice presidential debate will see Republican Mike Pence engaged in a verbal fight with Tim Kaine of the Democratic Party. The two will spar in a debate on October 4. According to Richard Hastings of Seaport Global Securities LLC, if the outcome of the debate leans towards the Democratic Party, similar to the Clinton, Trump debate, then it can be safely assured that the market will remain stable. Michelle Meyer of Bank of America Merrill Lynch She agrees that the economy can be on the softer side during the immediate future months. She added that there will be uncertainty due to the election.
There continues to be worries concerning European banks, especially Deutsche Bank. The latter should reach settlement with Department of Justice over its alleged illegality of packaging mortgage backed securities. This action was one of the many that culminated in financial crisis of 2008. Matthew Peterson of LPL Financial stated that even as resolution of real issues will take time, the intervening period will see European bank prices heavily influenced by money traders and large global hedge funds. He said that a large number of such traders have bet against the European banks while a few are buying them with the hope of recovery.